< Maryland man sentenced for using Ponzi scheme worth over US$396 million - Canadian Fraud News Inc. | Fraud related news | Fraud in Canada

Maryland man sentenced for using Ponzi scheme worth over US$396 million

Baltimore (October 16, 2019) – Kevin B. Merrill from Maryland was sentenced to 22 years in federal prison for conspiracy and fraud conducting a Ponzi scheme worth over US$396 million. Together with his co-conspirators, he defrauded investors using his companies Delmarva Capital and Global Credit Recovery claiming to purchase consumer debt portfolios from 2013 to September 2018. On October 10, the U.S. district attorney of Maryland proclaimed the judgment of the largest investment scam ever charged in the state’s history.

The U.S. Attorney’s Office in the District of Maryland published a statement on October 10 about the judgment of Kevin B. Merrill from Towson, Maryland. The 54-year-old has been sentenced for conspiracy and wire fraud and faces 22 years in federal prison, followed by three years of supervised release.

Sentenced for conspiracy and fraud

Merrill and his co-conspirators, Jay B. Ledford and Cameron R. Jezierski conducted a Ponzi scheme that defrauded investors out of US$396 million between 2013 and September 2018. Moreover, at the time of the arrests, they attempted to obtain an additional US$260 million in investments from unsuspecting victims. Therewith, this case was the largest ever charged in Maryland.

‘Considering there were hundreds of victims and millions of dollars lost, it is fitting that Kevin Merrill will be spending a significant amount of time in federal prison,’ said Special Agent in Charge Jennifer Boone of the FBI’s Baltimore Division.

The victim investors included small business owners, restauranteurs, construction contractors, retirees, doctors, lawyers, accountants, bankers, talent agents, professional athletes, and financial advisors, located in Maryland, Washington, D.C., Northern Virginia, Boulder, Texas, Chicago, New York, and elsewhere.

U.S. District Judge Richard D. Bennett ordered Merrill to pay restitution in the full amount of losses which will be determined later. Additionally, Judge Bennett will also enter an order of forfeiture, with the exact amount of forfeiture still to be determined. In addition, the U.S. Securities and Exchange Commission (SEC) has a pending parallel civil action against Merrill in this matter.

A Ponzi scheme worth over US$396 million

Merrill was the ‘front man’ promoting the fraudulent investments to potential investors. He and his co-conspirators started the investment fraud scheme in January 2013. According to the plea agreement, Merrill claimed to purchase consumer debt portfolios with the investors’ money through his companies Delmarva Capital and Global Credit Recovery. In order to add credibility, he knowingly used fictitious sales agreements and other documents, including tax returns, provided by his co-conspirator Ledford, to induce individuals to invest.

The U.S. attorney’s office stated that Ledford created false portfolio overviews, sales agreements which used the names and forged signatures of actual employees of the sellers, collections reports, and falsified bank statements and merchant account reports. Finally, Merrill and Ledford falsely told their investors that their funds were returns of their investment, when in fact, the proceeds were paid – in the manner of a classic Ponzi scheme – from money provided by other investors. They confessed using the fraudulently obtained funds to purchase and renovate real estate in the U.S., gamble at casinos, purchase luxury cars and jewelry, and to support a lavish lifestyle.

‘Kevin Merrill lured investors through an elaborate web of lies, duping them into paying millions of dollars into this Ponzi scheme,’ said U.S. Attorney Robert K. Hur. ‘As a result of this scheme, a number of victims were devastated, losing their life savings. This sentence sends a strong message that federal prosecutors, federal agents, and our SEC partners will continue to work together to investigate and prosecute those who perpetrate these kind of fraud schemes for their personal gain—leaving a wave of victims in their wake.’

Merrill’s wife admits she tried to hide fraudulent money

Furthermore, Merrill attempted to obstruct justice by causing his wife to remove assets from their Naples, Florida home after he had been arrested. He instructed his wife via a handwritten note during a visit in the detention center on December 5, 2018. 30-year-old Amanda Merrill pleaded guilty to conspiring to remove property and obstruct justice on October 9. Her sentencing is scheduled for January 2020.